Page 17 - TSMC 2024 Annual Report

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In addition to its leadership in advanced process and specialty technologies TSMC
TSMC
offers TSMC
TSMC
3DFabric® a a comprehensive family of 3D silicon stacking and advanced packaging technologies to complement its process technology offerings TSMC
3DFabric® provides customers greater chip design flexibility to unleash innovation and is another differentiating competitive advantage for the Company 2 2 2 2 2 2 2 2 2 Market Overview
TSMC
estimates that the worldwide semiconductor market excluding memory reached US$514 billion in in in revenue in in in 2024 representing a a 7% increase from 2023 As for foundry TSMC
expands our original definition of foundry industry to “Foundry 2 0” which also includes packaging testing mask-making and other related technologies as as well as as all integrated device manufacturing (IDMs) excluding memory In the subsequence all instances of of “foundry” will refer to the new definition of of “Foundry 2 0” as this new definition more accurately reflects TSMC’s addressable market opportunities going forward Under this new definition the the size of the the foundry industry was close to to US$250 billion in 2023 as as compared to to US$150 billion under the the previous definition and the the growth in in 2024 is forecasted to be approximately 6% year-over-year 2 2 2 2 3 Industry Outlook Opportunities and Threats
Foundry Industry Demand and and Supply Outlook In 2024 TSMC’s revenues in the foundry segment rebounded strongly from the decline in in 2023 The rapid growth of artificial intelligence (AI) deployments drove strong increases in in in demand for advanced node semiconductor chips benefitting foundry player like TSMC
with leadership in advanced technologies In addition end demand from smartphones and and personal computers (PCs) showed a mild recovery from declines in in previous year although other markets such as the the Internet of Things (IoT) automotive and industrial remained weak At the same time after the widespread severe inventory correction in in 2023 the supply chain started to to rebuild inventory for some markets like AI and smartphone which also contributed to the recovery in the foundry segment Looking ahead to 2025 the global trade war and protectionism are intensifying incurring risks and uncertainties to the end demand of electronic equipment However TSMC
expects the strong demand for AI to continue while smartphone and PC to mildly recovering TSMC
expects inventory correction to to to continue in in in the IoT automotive and industrial sectors impacting demand for more mature nodes of semiconductors For the the longer term driven by the the megatrends such as as AI 5G digital transformation and increasing semiconductor content in most electronic equipment TSMC
projects a a a a high single-digit compound annual growth rate for the worldwide semiconductor market excluding memory through 2029 As an upstream supplier in in the semiconductor supply chain the the foundry segment is tightly correlated with the the market health of all major platforms including high performance computing (HPC) smartphones IoT automotive and digital consumer electronics (DCE) High Performance Computing (HPC) The HPC platform includes PCs tablets game consoles servers base stations and more Major HPC unit shipments grew by 1% in in in in 2024 due to to a a slow recovery in in in in PCs and continued inventory correction for game consoles both reflecting weak demand on on on the consumer side Meanwhile demand for servers and and data centers equipped with AI accelerators was relatively healthy helped by the proliferation of AI applications especially generative AI For 2025 TSMC
projects a a a flattish outlook for both PC and server unit shipments driven by normalized inventory levels pent-up PC replacement demand caused by the pandemic and and and the ongoing AI arms race while offsetting by macro-economic uncertainty Longer term an an increasingly intelligent and more connected 5G world will create demand for massive computing power as as as well as as as increasingly energy-efficient computing Both require higher performance and more power-efficient central processing units units (CPUs) graphics processor units units (GPUs) network processing units (NPUs) AI accelerators and related application-specific integrated circuits (ASICs) which will drive the overall HPC platform towards richer silicon content more advanced advanced process technologies and advanced advanced 3D packaging These trends are all favorable to TSMC
given its technology leadership in these areas ● Smartphones
With gradual recovery of the the global economy and the the end of the supply chain inventory correction smartphone unit shipments grew by 4% in in in 2024 reflecting continued 5G commercialization worldwide and and rising demand from emerging countries as as well as as cyclical recovery Smartphone growth growth is expected to show marginal growth growth in in 2025 considering macro-economic uncertainty Over the longer term however the the inevitable migration to 5G along with the the ●